👉 Background: Mecca is the giant Australian beauty retailer founded back in 1997 and has been become a premium one-stop shop for all things skincare, makeup and fragrance in Australia. Recently, it made major headlines by launching its first 3-storey beauty concept store in Melbourne that features a cafe, nail salon and hair salon inside.

‍👉 What happened: Mecca’s latest accounts revealed a record revenue of $1.4 billion for 2024 which included a $110 million dividend payout to a trust fund. While Mecca claims that this dividend was paid to another company that funds Mecca's growth, these financial details aren't actually reported anywhere.

‍👉 What else: So now, ASIC is chasing up Mecca for being tardy and non-transparent with its use of company funds. ASIC wants answers… and it wants them pronto!

‍What's the key learning?

‍💡Even if you’re a private company with a cult following, compliance isn’t optional. As a large proprietary company in Australia, you need to provide a whole suite of reports to ASIC within 4 months of the end of financial year.

💡While Mecca isn’t publicly listed, it’s considered a large proprietary company because it has more than 100 employees and its revenue is over $50 million. However, Mecca has repeatedly failed to lodge its reports on time for several years. And the recent disclosure of a large dividend payout - without much detail, was enough to raise ASIC’s alarm bells.

💡Mecca isn’t the only private company that’s received a touch-up from ASIC. Back in 2022, ASIC gave LycaMobile a fine for failing to submit their 2018 and 2019 financial reports. So clearly, ASIC isn't messing around with its reporting.